TSMC’s June sales shine after virus drives demand for data centre chips
- Executives forecast revenue growth of about 30 per cent in the June quarter while sticking to a goal of US$15 billion to US$16 billion for capital spending in 2020
- In the longer term, the chip maker will still have to contend with uncertainty as Covid-19 spreads across the globe
Taiwan Semiconductor Manufacturing Co. posted monthly revenue that suggested June-quarter sales surpassed analysts’ estimates, underscoring how its technological lead is helping the chip maker weather the pandemic and US curbs on its No 2 customer Huawei Technologies.
Apple’s main iPhone chip maker reported sales of NT$120.88 billion (US$4.1 billion) for June on Friday. That likely means TSMC’s revenue grew about 29 per cent to NT$310.7 billion last quarter, based on previously reported figures, beating the NT$308.8 billion analysts expect on average.
TSMC, a barometer for the industry thanks to its heft in the global supply chain, had previously lowered its 2020 revenue outlook to reflect potentially the biggest global economic crisis since the Great Depression.
But it said at the time it still expects robust demand for the semiconductors in data centres hosting an unprecedented surge in online activity during the pandemic.
Executives forecast revenue growth of about 30 per cent in the June quarter while sticking to a goal of US$15 billion to US$16 billion for capital spending in 2020, up from last year’s US$14.9 billion.
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In the longer term, the chip maker will still have to contend with uncertainty as Covid-19 spreads across the globe, particularly as signs emerge of a second wave. TSMC however is considered relatively more resistant to a downturn thanks to a commanding position in the production of high-end chips needed for everything from data centres and gaming to video streaming.
It is also the primary producer of cutting-edge chips for Huawei, but the Trump administration’s ban on the use of American chipmaking gear for the Chinese company threaten a business relationship that accounts for about 14 per cent of TSMC’s revenue.
